Federal Treasurer Scott Morrison has declared he is focussed on cutting spending, as the Coalition backbench continues to agitate against any changes to negative gearing in the Government’s tax plan.
Mr Morrison will today make his first address to the National Press Club as Treasurer, and will reiterate the Government’s commitment to reducing spending.
He will tell the audience the Government is “holding the line” on expenditure, but that spending remains a problem.
Mr Morrison will also make the case for income tax cuts.
“The Government understands that a dollar in your hand means you are more likely to make it into $2, while a dollar in the Government’s hand is more likely to turn it into 50 cents,” he said.
“Government budget savings and increases in revenue, as a result of economic growth, should benefit Australian income taxpayers.”
The speech comes at a time when the tax debate is finely poised, with Coalition backbenchers clamouring to be heard.
Labor has seized the initiative by proposing to abolish negative gearing on existing properties from 2017.
The Government has also been contemplating some changes to negative gearing but Coalition backbenchers, who agitated against any increase to the GST, are now pushing firmly against any substantive changes.
Government frontbenchers are at pains to emphasise that the Government is still working through several different ideas.
No negative gearing plans at this stage: Joyce
Incoming deputy prime minister Barnaby Joyce said Cabinet was yet to make a final decision on negative gearing.
“There’s nothing been finalised. I’m always amazed when people finalise these plans before we’ve actually had them to Cabinet,” Mr Joyce told ABC Local Radio.
“Now, I don’t know, unless someone knows of a Cabinet meeting that I haven’t been to, at this stage there is no negative gearing plans.”
Liberal backbenchers pushing for a reduction in spending acknowledge the Government also needs to find a way to raise more revenue in order to fund income tax cuts.
Some MPs believe the best way to do that would be to cut superannuation tax concessions.
Liberal Senator Zed Seselja said if the Government raised more revenue through superannuation then it must be handed back through tax cuts.
“If you were to go down that path and you were to offer income tax relief as a result, thereby giving people more choice over their finances well that’s the sort of reform I’d be open to,” Senator Seselja said.
“It’s stimulatory. It gives people more of their money. Now, they can choose to spend that or they can choose to invest that for their future and, as Liberals, I think we should support that and we should support lower taxes where possible.”
Another Coalition MP said superannuation tax concessions had to be “priority one, two and three” if the Treasurer was intent on raising more revenue.
“It’s the only big ticket revenue measure which would be acceptable — so long as it comes with big spending cuts, which are the most important thing.”
– Stephen Dziedzic and Francis Keany